Life Insurance Scammer Swindled Elderly While Living Large

Christian M. Allmendinger, a top executive at a company that defrauded hundreds of investors out of more than $100 million, has been convicted by a federal jury for his role in the scheme, the Justice Department announced.

Allmendinger, a 39-year-old Houston resident, was co-founder and vice president of A&O Resource Management Ltd., which bought and sold life settlements, which allow owners of life insurance policies to sell them before they die for more than they would receive if they cashed them in with their policy holders.

A&O Resource Management swindled more than 800 investors in the U.S. and Canada -- many of them elderly -- while Allmendinger and his cronies enriched themselves at their expense, department lawyers said. Allmendinger treated himself to a number of luxury items, including a $2 million house, a Lamborghini Spyder and a 15-carat diamond ring, according to court documents.Allmendinger was convicted on one count of conspiracy to commit mail fraud, two counts of mail fraud, one count of conspiracy to commit money laundering, two counts of money laundering, and one count of securities fraud. When he's sentenced Aug. 12, Allmendinger faces up to 20 years in prison on each count, apart from the securities fraud count, which could cost him another 5 years in prison.

His conviction was part of Operation Broken Trust, the largest crackdown on financial fraud in U.S. history, which was announced last December.

"Christian Allmendinger stole millions from elderly retirees to buy flashy cars and a multi-million-dollar home," U.S. Attorney for the Eastern District of Virginia Neil H. MacBride said in a statement. "Mr. Allmendinger has now been held accountable for his crimes, and we will continue to pursue other financial fraudsters who prey on those in Virginia and throughout the country."

On Sept. 7, 2010, a federal grand jury returned an 18-count indictment against Allmendinger and two other principals of A&O Resource Management Ltd., Adley H. Abdulwahab and David White, as well as various related entities that acquired and marketed life settlements to investors.

According to court documents, Allmendinger and his co-conspirators defrauded investors by lying about A&O's track record, size, office locations, number of employees, the risks involved with its investments and the safekeeping and use of investor funds.

When state regulators began to scrutinize A&O's bogus investment products, Allmendinger and his cronies decided to sell A&O in August 2007, which ended his involvement with the life insurance scheme. The indictment alleges that co-conspirators, including Abdulwahab and White kept the scam alive until September 2009 though a series of sham sales.

Before Allmendinger jumped ship, A&O conned approximately $80 million from some 500 investors. By the time the A&O's scheme was shut down, it managed to swindle more than 800 investors out of more than $100 million.